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That Time Donald Trump Faked a Hostile Bid for United Airlines

That Time Donald Trump Faked a Hostile Bid for United Airlines
Jeff Edwards

In its analysis of nearly a decade of Donald Trump’s tax information obtained by the New York Times, the Gray Lady highlighted a surprising tactic the real estate magnate used to turn speculation over the future of hotel conglomerates and airline groups into a huge cash windfall by reportedly portraying himself as a Wall Street raider.

Tax information obtained by The New York Times has grabbed headlines primarily for the staggering financial losses property-developer-turned-politician Donald Trump reported between the years of 1985 and 1994. Lost in the news of billions of dollars in business losses is a fascinating account of a unique way the already at the time famous mogul earned millions of dollars by trading on rumors that he was prepared to launch hostile takeovers of companies, including United Airlines, American Airlines and Hilton Hotels.

These takeover bids, of course, never transpired, but the newspaper reports that Trump quietly sold his personal shares after rumors he would be attempting to seize controlling interest in the corporations substantially raised stock in the companies. According to media reports at the time of the rumored United Airlines takeover bid, divesting himself from the airline after it was believed he would attempt to buy the company led directly to a $55 million windfall for the famous dealmaker.

According to the investigative report, transactions following the same pattern netted the tycoon another $57 million after establishing himself a potential corporate raider at Hilton Hotels, Gillette and even Macy’s Department Stores before he suddenly dumped shares after stock prices soared. If Trump’s apparently make-believe scheme takeover of United Airlines provided the blueprint for what would become a lucrative investment tactic, however, it was his attempt to repeat the feat with another legacy carrier that put an end to the pattern once and for all.

By the time rumors begin to circulate that Donald Trump was preparing to initiate a takeover at American Airlines in 1989, investors reacted with a shrug. It seems Wall Street had heard this fish tale a few too many times. One airline analyst told the Associated Press at the time that he was “very skeptical of everything this man does.” Unfortunately for Trump, American Airlines stock price betrayed a similar skepticism among investors.

To put the events of nearly three decades ago into context, it is worth noting that the blockbuster movie “Wall Street,” which garnered a Best Actor Oscar for Michael Douglas, was released in 1987 with the memorable tagline “Greed is Good.” Much like the fictional Gordon Gekko, in the real world, corporate raiders were busily carving up legacy carriers such as Eastern Airlines for parts. Fortunes were being won and lost speculating on which carrier would become the next to be purchased with junk bonds.

Like most other moves made by the controversial political figure, the judgement over whether Trump’s 1980’s investment strategy is viewed as a brilliant businessman’s winning gambit to take advantage of the zeitgeist of the time or just another example of shady dealing by a common conman, will likely depend on the eye of the beholder – or in this case perhaps, the deeply political leanings of the reader.

 

[Image Source: Shutterstock]

View Comments (16)

16 Comments

  1. JT51

    May 10, 2019 at 5:54 am

    Lets see, losing a billion dollars of other people’s money then claiming the loss as his, so as not to pay taxes. I don’t think it’s a matter of the eye of the reader, but whether you want to believe it or not, is he a con man or a brilliant businessman.

  2. alexmyboy

    May 10, 2019 at 5:58 am

    he is such a moron and narcisist

  3. PepeBorja

    May 10, 2019 at 6:33 am

    Old news being recirculated from Trump’s biggest enemy, also the basis for his Art of The Deal book, a TV documentary on his failed business ventures and his own words on the TV show the Apprentice. If the NYT (and the rest of their “News” cohorts) reported on Thomas Edison they would described him as a failed inventor for having tried 1000 times to create a lightbulb and failing each time. They pick what fits their narrative, not the whole picture. Edison is America’s greatest inventor in spite of his thousands of failed attempts.

    Set aside politics…. anyone saying they would loath to have Donald J Trump’s business and entrepreneurial drive or enjoy a few day’s of a life like DJT is lying. I mean, the man flew in his own 757 with Gold fixtures for Pete’s sake!

  4. amt

    May 10, 2019 at 9:40 am

    Only $55million… he’s not even a mediocre corporate parasite. By comparison all in Carl Icahn probably ended up plundered TWA to the tune of a billion dollars…

  5. RobertSDF

    May 10, 2019 at 9:56 am

    Really sorry this site feels the need to inject politics into an otherwise enjoyable site.

  6. Batman's brother

    May 10, 2019 at 10:16 am

    It will be fun to read all the “Orange Man Bad” posts for the next 6 years.

  7. drphun

    May 10, 2019 at 10:56 am

    Or he intended to make the takeover bid, but someone leaked, the price ran up to where it didn’t make sense to move forward, so he sold and moved on. Not him in particular, but anyone could say that in the same situation.

  8. JoeDTW

    May 10, 2019 at 12:30 pm

    Dan Reed’s book about American Airlines in the Crandall years (The American Eagle) says AA was prepared to file a Racketeer Influenced Corrupt Organization (RICO) lawsuit against Trump in a friendly Fort Worth court if Trump had proceeded with his takeover attempt against AA. The lawsuit would have forced Trump to reveal all of the financial workings of his organization to the public.

  9. spartacus

    May 10, 2019 at 12:43 pm

    What else are we offended by today? So now FT wants to get political? Stick to travel. It’s the formula Randy made successful.

  10. BC Shelby

    May 10, 2019 at 3:22 pm

    ….yeah Eastern was a sad story. Frank Lorezo had controlling interest in both Continental and Eastern. He effectively gutted Eastern for the benefit of Continental which he still nearly flew into the ground in the end.

  11. HawaiianGuy

    May 10, 2019 at 8:04 pm

    Pfftt. “NYT”. Now there’s a scary rag masquerading as truth. You’ve sunk to a new low, Edwards. Quit using this venue to further your cheap Anti-Trump agenda. I find it extremely offensive. Stick to what you know best instead of trying to score some cheap political points via your Uber-Liberal rant. NO ONE wants to hear it except Sore Losers with TDS. You got it? You do NOT impress me, snowflake.

  12. sleuth

    May 11, 2019 at 8:12 pm

    RobertSDF, i’m really sorry your state is one of the poorest in the nation. I wonder why….. FT is still an enjoyable site.

  13. sethb

    May 13, 2019 at 8:14 am

    Looks like criminal stock market manipulation/insider trading to me. I wonder if the SEC will ever act on it.

  14. Dhamal

    May 20, 2019 at 6:19 am

    Please keep politics out of this page.. no need for the BS

  15. Whiskey_bravo

    May 23, 2019 at 11:57 am

    Stay out of politics please.

  16. Dhamal

    May 24, 2019 at 6:05 am

    Last time I check this was Flyer Talk channel not a Political showdown forum

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